Crowdfunding approvals pave way for neo-banks

Last week, ASIC licensed the first seven intermediaries under the government’s new crowd-sourced funding regime, allowing eligible companies to raise capital by making offers of ordinary shares to investors via the online platform of one of the intermediaries.

In response, Xinja – a fintech operation that intends to become “Australia’s first 100 per cent independent digital bank” – issued a statement welcoming the development.

“It is fantastic that these regulatory barriers have been removed and Xinja can now access the funds needed to help build our product offerings and give the entrenched banks something to think about,” said Xinja founder Eric Wilson, a former CEO of NAB’s trustee business.

“The ‘Xinjas’ who make up our pre-launch customer base have already told us loud and clear that they want to be involved from the very start. They are ready for a new banking experience and know like we do that it will be a thrilling and challenging journey.”

Mr Wilson said crowdfunding is likely to become a large part of the business model for challenger or digitally-focused neo-banks, and he is hoping to have a banking licence approved in the near future.